The Effects of Globalization on Labor Relations in the Auto Industry in the 80s and 90s

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The Effects of Globalization on Labor Relations in the Auto Industry in the 80s and 90s

Over the last several decades Labor relations within the United Auto Workers (UAW) and the automakers they are attached to have been a roller coaster ride. In the 1960’s and 1970’s the Union made substantial gains for its members in all aspects of bargaining. Wages were increased at levels unheard of today and they made huge improvements on health care and other fringe benefits. Membership was steadily increasing and the union’s power was profound. The Nations economy was growing as fast as the baby boomers who were driving it and globalization was a term seldom heard of. Strikes were a lethal weapon in the union’s arsenal and they would use them at will when dealing with uncooperative employers. The mere thought of cooperating with management was a cardinal sin and the two sides battled constantly to see who could “one up” the other. In the early eighties the economy and the rise of foreign competition reluctantly forced the automakers and the unions to form an averse partnership. Up to this point the Big Three (GM, Ford, and Chrysler) were manufacturing vehicles primarily in the United States and the UAW was at the peak of its power. The UAW was able to keep the companies in check because almost all of the automakers’ employees were union members. Today U. S. trade policies and the global economy give big corporations an unfair advantage over the unions. The UAW’s failure to keep up with the Big Three in the global market is rapidly diminishing the balance of power that once existed between the two collaborating adversaries and their ability to play catch up will be vital to the organizations survival. In order to understand the effects the global market had on the balance of power between the union and the companies in the last decade, one must look back even further, at the prior two decades. The eighties began with a recession that crippled the economy and forced layoffs for the automakers. Although the UAW’s membership began to decline, the union still had a considerable amount of power. Times were tough however and the UAW was left with no choice but to approach negotiations in an untraditional manner. The conventional union management relations game that the Big Three and the UAW engaged in for years had to cease. For the first time in history the companies and the union began to realize the importance of cooperation and worked together at the negotiating table. The union understood the situation the automakers were faced with and although they didn’t give in to all of the corporations’ demands, they agreed to take some concessions in order to help them survive the ailing economy. In a joint effort to pass the concessionary agreements, both parties told hourly workers that the concessions were temporary and that when the economy recovered so would the labor contracts. The economy began to recover steadily in the late eighties and the automakers along with the UAW survived the recession. The external pressures of the economy had a profound effect on labor relations in the auto industry. It exposed weaknesses of both the union and the companies. The UAW was an international organization whose strength correlated directly with the size of its membership and the national market power of the domestic automakers that employed its members. They were hit harder than the Big Three and they were not able to restore the balance of power they had achieved in the sixties and seventies. The losses the UAW endured during the recession and the concessions that their members accepted in the previous contracts were never made up. The economy was only part of the reason the union had difficulties regaining its position. Around the same time the nation began recovering from the recession; globalization was taking up roots within the Big Three and around the world. Foreign competition was on the rise and management...
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